How can a business measure its success?

It’s vital to regularly measure the success of your business. If you don’t, it can be tough to decide how to move forward. There are many different ways you can measure success, so you need to make sure to pick the right one for your business. 

This guide will provide you with examples of how you can measure success and how to use those measurements to make decisions. There are hundreds of different metrics you can use, but this article will focus on:

• Setting goals
• Website traffic
• Customer satisfaction
• Sales

A very simple way to measure success is to set goals. At the start of each month, use your previous sales figures to set yourself a sales target. If you’re not a sales-based business, you can set yourself a target of attracting a set amount of new customers or clients. If you’re a new business without any previous figures to work from, check out our article on setting yourself sales goals.

Also, remember to consider what kind of business you run when setting sales targets. If your business deals in very high-value transactions, one new client or sale a month might be enough, so don’t set unnecessarily high goals for the number of new customers.  

Tracking the number of new customers and sales you’re making through the week will give you a clear picture of whether you’re succeeding or not. The goal doesn’t have to be the total number of sales but the concept is always the same: set a target and track the progress you make towards that target. When you reach the target, you’ll know you’ve achieved some success.

As well as deciding what your goals will be, you should also think carefully about the time frame you set for achieving them. If you have annual sales targets instead of monthly, you might go an entire year without realising you’re nowhere near the mark you’ve set. Annual sales targets aren’t always a bad thing, but you need to make sure you also have weekly or monthly goals so you can make plans if you’re below target.

If you operate an online business, you rely on having a healthy stream of visitors to your website. Even if you run a brick-and-mortar store, you should still have a high-quality website in order to attract new customers. 

Analysing customer activity on your website is a great way to measure success as there’s so much information available. You track the number of visitors, and see how many of these visitors are new to your website and how many are returning customers. Furthermore, some software tools like Google Analytics can even track what visitors are doing on your website – whether they’re actually buying or just looking.

Website traffic is a good indicator of success because it can measure the success of many different parts of your business. For example, a lot of new visitors to your website can indicate the success of your marketing and advertising efforts. 

An increase in the number of visitors that make purchases can show your website is doing its job successfully, but an increase in visitors without a rise in purchases might indicate your product pages need to be more engaging to encourage sales.

Customers have an enormous influence on your business, so it’s in your best interest to see that they’re satisfied. Regularly checking that your customers are satisfied can give you an idea of how successful any changes have been. 

Simply asking customers if they’re satisfied is a pretty effective method – you can do this by getting them to fill in a survey after making a purchase, or to leave a review on your website.

Keeping an eye on social media will also give you a good insight into whether your customers are satisfied with your service. Searching different social media platforms for any mention of your company can show you what customers have been posting about you – both good and bad – and maintaining social media pages for your business provides a channel for customers to provide feedback directly.

Measuring your business’ success by tracking your sales is similar to the idea of setting goals, but is slightly more complicated. While you’re still going to track the number of sales you’re making over a set period of time, you need to combine this data with additional factors. 

These additional factors might be things like price increases or marketing costs. By examining sales figures alongside these other factors, you can get an idea of whether your business is succeeding or if these additional factors are preventing that success.

For instance, if your sales drop after a price increase, consider increasing the price by a smaller amount or reducing the price of your other products. Price increases are sometimes necessary, but you need to take care that they don’t negatively impact your business overall.

Let’s take another example, say you notice the money you’re making from sales doesn’t cover the amount you’re spending on marketing. This indicates your marketing strategy may not be as successful as it could be. Look into spending less on advertising or using more effective marketing methods where you can measure the return on investment (ROI) more easily.

What makes a business successful? Read on for our checklist of five key factors to be thinking about when you’re starting your own business.

When you’re running your own business, cash flow management is key. For example, consider if clients are paying you promptly, or if late payments causing blockages in cash flow. Maybe you have loans that could be repaid now, thus saving interest. Or perhaps it’s better to wait until the finances are looking healthier. Ask yourself if there are certain lines that are not pulling in any profit, so affecting profit margins as a whole. Take a good look at your business cash flow, identify any pinch points – and act accordingly.

Make use of apps that can help you keep on top of your business finances and monitor cash flow. Countingup is one that automates financial admin and provides live cash flow insights.

Small businesses must be able to adjust quickly to meet new demands. A recent example of this was the global COVID pandemic, which saw many cafes and restaurants adapting quickly to provide takeaway food and drink, rather than on-site service.

To survive and thrive, small businesses need to be adaptable – ready to alter or abandon less successful product lines, or quickly upscale production of in-demand products or services in light of changing circumstances.

You may have the best product or service for miles around, but are you getting that message out there? Do people know to come to you, instead of your competitors? 

The first step is simply learning the best way(s) to reach your market. One way to start is to connect with other local businesses and learn what works for them. Use Google Analytics to learn how people are finding your website, and where they are coming from. And, of course, talk to your customers and discover how they are finding out about you. 

If you decide to invest in paid advertising, make sure you know how to measure its success. If you launch any special offers or deals, track their performance too. Find out which channels are best at finding you new customers and consider investing more in them.

Aside from the quality of your product, one way to stand out as a small business is in the standard of your communication with customers, both existing and potential. 

Be prompt and helpful with your replies. The customer looking for a solution to their problem will have questions and will go with the business that replies quickly and most comprehensively to their query. 

Respond promptly and helpfully to any queries or complaints from existing customers. From Angi to Trustpilot to Yelp, consumer review websites influence customers’ choices – make sure that you’re earning some glowing reviews online.

It’s important to know where you’re going as a company. Where do you want to be in five years? A detailed business plan is key to setting down your company’s future. Like those New Year’s resolutions we all try to keep, though, the key is to make the objectives as detailed and actionable as possible. Think precise targets and timeframes, rather than vague aspirations. Identify some Key Performance Indicators (KPIs) – whether financial, such as profit margin, or non-financial, such as customer satisfaction or online visibility – and use them to shape your business’s future.

The most obvious way to measure the success of a business is to simply check how much money you’re making. While this is an easy way to measure success, it’s not very detailed. You should sample a much wider range of financial data in order to get a clear picture of how well your business is doing. 

This being said, getting a detailed picture of your finances can be difficult if you rely on physical paperwork. If you want to have all of your financial data in one easy-to-access place, consider using Countingup.

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. It’s seamless, simple, and straightforward.

Find out more here.